DESCRIPTION: Many prenylated proteins (e.g. the ras proteins) play important roles in cellular signal transduction, and prenylation is obligatory for their proper subcellular localization and function. Two new human genes encoding prenylated proteins have been isolated in the principal investigator s laboratory. These proteins (hPTPCAAX1 and hPTPCAAX2) possess intrinsic vanadate-sensitive tyrosine phosphatase activity, and behave as oncogenes when overexpressed in epithelial cells causing the appearance of a transformed phenotype and the formation of tumors in nude mice. The interrelationships between prenylation, tyrosine phosphatase activity and oncogenicity of these novel proteins will be investigated. The first Specific Aim will test the hypothesis that prenylation is required for their oncogenic function, by generating prenyl-deficient mutants and comparing their transforming activity to the wild-type proteins, as well as their subcellular localization. Specific Aim 2 will test the hypothesis that tyrosine phosphatase activity is required for their oncogenic function, by generating phosphatase mutants and comparing their oncogenicity with the wild-type proteins; in addition, in cell lines expressing the mutant and wild-type proteins by western analysis will be used to identify putative PTPCAAX substrates. The third Specific Aim will test the hypothesis that the overexpression of the PTPCAAX genes is associated with the transformation of epithelial cells, by comparing gene expression in normal and transformed cells, as well as by demonstrating that suppression of PTPCAAX expression will inhibit the transformed phenotype of carcinoma cells in culture. It is stated that these studies may provide a rational for the use of these proteins as molecular targets for cancer diagnosis and treatment.